Watchdog to intensify oversight of foreign currency liquidity, real estate lending

Apartment buildings in Seoul / Yonhap

South Korea's financial watchdog vowed Monday to keep closer tabs on financial institutions' management of foreign currency liquidity and real estate lending this year in a move to better respond to potential risks amid growing market uncertainties.

The Financial Supervisory Service (FSS) devised the plan for the New Year amid major countries' monetary tightening to rein in inflationary pressure, the prolonged pandemic and concerns over instability in the Chinese property market.

According to the plan, the FSS will enhance the monitoring of the non-banking sector's management of foreign currency liquidity and devise an advanced risk evaluation system.

The watchdog also plans to expand its oversight of companies' exposure to real estate financing. Currently, only brokerage firms, asset managers and trust companies are subject to the supervision.

In a move to tame growing private loans, the FSS vowed to integrate the management of household and individual business owners' lending this year, while seeking to reduce small merchants' burden of repaying their debt after the COVID-19 pandemic.

"We will closely monitor the market to learn risk factors on a real-time basis and share them with related institutions immediately to activate a joint response if needed," the FSS said in a release.

"We will also seek measures to better protect consumers by strengthening responses to any financial irregularities and boosting transparency in the market." (Yonhap)